FLORIDA RETAILERS LOSE IN BID TO RAISE THE INTEREST CEILING

Florida retailers lost a legal fight Wednesday in their efforts to raise the interest ceiling on consumer installment purchases and revolving credit accounts.

The 1st District Court of Appeal, in a 3-0 ruling issued without elaboration, affirmed an order by state Comptroller Gerald Lewis that, in effect, barred stores from calculating interest as if they were consumer finance companies.

Lewis' lawyers said if the Florida Retail Federation had won the court case, the maximum interest rate allowable on installment and revolving accounts would have risen from about 21 percent to 30 percent for debts between $100 and $500.

"Harsh terms, indeed," the comptroller's legal brief said.

At issue was a so-called "lender parity" law enacted by the Legislature in 1977.

The act was intended to make some order out of the numerous usury statutes then scattered throughout the Florida law books by providing that any lender licensed or chartered by the state could charge the same maximum interest rate set for any other lender sanctioned by Florida.

The parity law, however, also provided that for one type of lender to utilize the usury limit set for another, it would also have to abide by "other statutory restrictions related thereto."

Retailers contended they should be allowed the same maximum interest rate as loan companies and in 1981 asked Lewis for a declaratory order affirming that right.

In 1984, Lewis ruled that the stores indeed could use the loan companies' limit but would have to count the profits they earn on the sale of goods as part of the interest.

He cited a provision of the consumer loan company law requiring that "any profit or advantage" earned be considered as interest.

The retailers' argued that the provision was intended to prevent loan companies from making a purchase a condition for a loan and said Lewis' interpretation went against the intent of the Legislature.

"It was intended to treat all lenders and creditors with 'fairness' so that none would be 'placed at a competitive disadvantage' in the money-lending market," the federation said. "The comptroller's current interpretation of the parity statute with regard to the computation of profits as interest would defeat both purposes as far as retail sellers are concerned."